The Next Mortgage Banking 'House Of Straw!'

    My Thanks and appreciation go out to Ross Farr of Columbia Mortgage and Right Start Mortgage. The Lions share of the preceeding BLOG entry was written by Ross and I am in his debt for sharing with me the true inner workings and disfunctions of the home mortgage world. I am richer in knowledge and ethics as a result of my affiliation with Columbia / Right Start Mortgage. Together we write some kick ass loans in a tough environment where the BIG Banks want to absolutely benefit from the situation they created, eliminate all Brokers and hence your rights to FULL disclosure. Dont ever let that happen! You'll never know what hit you - and thats the way the Banks want it!

 See you on the Beach!

 http://JeremyHickling.com

KIRKLAND, WA, June 4, 2009 – Waiting longer to buy a home is not likely to pay off, according to Northwest Multiple Listing Service director Kathy Estey after reviewing reports summarizing May activity. Estey pointed to shrinking inventory (about 20 percent fewer listings than a year ago), double-digit increases in the number of pending sales (up 17.7 percent from a year ago), solid open house activity, and signs of stabilizing prices (eight of the 19 counties in the report show price gains since January) as indicators of an improving market.

Northwest MLS brokers notched 7,160 pending sales during May. That total out-gained the year-ago tally by 1,075 transactions (up 17.7 percent) and improved on April’s total by 242 sales for a 3.5 percent increase. For the four-county Puget Sound area, pending sales jumped 21.5 percent from a year ago, rising from 4,526 to 5,498 transactions.

Buyers had fewer choices during May than at this time a year ago. At month-end, member-brokers reported 41,318 active listings throughout the NWMLS service area. A year ago, there were 51,817 active listings. Current inventory includes 11,278 single family homes and condos that brokers added during May. For the same month a year ago, brokers added 14,176 new listings to inventory.

Estey, the managing broker at the Bellevue Downtown office of John L. Scott Real Estate, said affordable homes inventory is down to the levels of a normal market and reaching for a sellers’ market. “Multiple offers are common in the under $400,000 range when the home is priced well, shows nicely and is marketed professionally,” she remarked. “Buyers who are waiting for prices to come down more have missed the bottom,” Estey believes.

Close in markets are the most active, with rural areas still lagging, but Estey says there is now some activity where little to none had existed in the first quarter. She believes prices have adjusted and completed new construction is still a very attractive purchase. “Builder inventory is being absorbed and there are fewer incentives. In January builders were giving away the farm, by March it was only half the farm and now they may just give away a chicken or two in order to make the deal.”

Prices are showing signs of stabilizing, according to NWMLS data. Prices area-wide are down around 10 percent from twelve months ago, but a comparison to January shows price gains in eight of the 19 counties in the NWMLS report. System-wide, prices for single family homes and condominiums that closed last month are up about 2.6 percent since January. (See chart, page5.)

In King County, prices dipped about 12 percent from twelve months ago and have declined about 3.5 percent since January, but a closer look shows considerable variation within sub-areas. Prices in southeast King County fell 20 percent from a year ago, but since January are down only about 2.8 percent in north King County.

Condominium activity remains slow. Pending sales are down about 15 percent from a year ago. The median sales price of $240,000 is about 7.7 percent lower than a year ago. Condos in King County sold for a median price of $270,450 last month, which compares to the year-ago price of $287,925, a drop of about 6 percent).

Demand for high-priced homes is also tepid. According to Estey, there are “amazing opportunities for buyers with good credit scores and 25 percent down payment in the $900,000- plus marketplace.”

“What we’re currently seeing is real estate’s version of Back to the Future,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He believes the combination of historically low interest rates, adjusted lower prices, and the $8,000 tax credit has created advantageous conditions for buyers that haven’t been seen in decades. He noted sales in the four-county area continue to see double digit increases. “The more affordable markets are seeing a major boost which is leading to higher sales in the mid-priced markets and causing some increases in activity in the upper end,” Scott remarked.

While cheered by the more vigorous activity, brokers note short sales and foreclosures continue to be a drag on the market. Such properties, often sold at deep discounts, may take extraordinary time to close once there has been mutual acceptance of an offer. (Note to editors: see explanatory note, p. .5)

NWMLS director Meribeth Hutchings, broker/owner of Windermere Real Estate/Lake Stevens Inc., said her office represents the buyer of a short sale that has been pending since October. The buyers who hope to purchase the home in Mukilteo have been very patient, but are becoming less so and are ready to move from the small apartment where they have been living with two large dogs. “Every time we think we are getting close, the lender changes what they want,” Hutchings stated.

Another NWMLS director, Pat Grimm, reported similar experiences with a short sale. “We just closed one in Montlake on May 28 — after the parties to the transaction reached mutual acceptance on Feb. 10, said Grimm, the owner/broker at Windermere Real Estate/Capitol Hill. (NWMLS defines a short sale as a transaction that does not produce sufficient funds to cover the existing monetary encumbrances against the property, closing costs, real estate commissions, and other financial requirements of closing.)

Tacoma broker Dick Beeson of Windermere/Commencement Associates said he has several agents deeply involved in handling short sales since Pierce County is so hard hit. He estimates around 25 percent of all properties for sale are either bank owned or short sale, and one of every three pending sales is one or the other.

“Short sales play a big role in what many buyers are looking for,” according to Beeson, who also noted these buyers often fail to realize the extraordinary length of time it takes to close a sale – generally twice as long as a conventional sale. “Many get discouraged after 60 or 90 days and withdraw from a sale, never having received notice form the underlying lender what they are willing to take for the property. Many properties end up going to foreclosure because of the inefficiency of the banks in providing answers to offers,” Beeson commented.

The recent uptick in pending sales, both locally and nationally, is a hopeful sign that we’re putting the worst of the market behind us, suggests Ron Sparks, managing vice president at Coldwell Banker Bain.

“As you would expect in a recovering market, not all neighborhoods are uniformly performing, and for home sellers particularly, there are plenty of challenges that remain.” However, he observed, “In many neighborhoods where just a few years ago broad affordability had all but vanished, lower prices, flexible terms and very low interest rates are pushing inventory absorption for single family homes to levels not seen since 2007.”

Sparks said multiple offers for the best listed properties are occurring everywhere, including Pierce and Snohomish counties. “Improving sales in one neighborhood helps dwindle inventory, and can push motivated buyers to search for homes in other neighborhoods. This process typically occurs before prices start to stabilize,” he explained.

Has that stabilization begun? “As my old Magic 8-Ball used to tell me: signs point to yes,” according to Sparks, who noted eight counties served by the NWMLS have seen price increases since January. “The sales volume in my Bellevue office is now roughly 10 times what it was in February, with expanded sales in almost every price category. Overall inventory levels have dropped substantially as well. Does this mean the optimal time for home buyers to take full advantage of favorable market conditions has passed? I’d probably defer that to the Magic 8 ball also…“Ask again later.”

Recent fluctuations in mortgage rates have brokers and buyers alike wondering if rates will escalate as inflation worries return.

“While rates now are wonderfully low, waiting has cost buyers. Loans recently available for 4.75% are now 5.25%,” according to broker Kathy Estey. On a $400,000 loan, that means the monthly payment rises from around $2,128 to about $2,253 – and increase of nearly $125. She believes it would be wise to act now for the best selection in the affordable homes. “Who knows if we will see rates of 5% or below again anytime soon,” she wonders.

Commenting on a recent report from the National Association of Realtors showing a third consecutive month of improving pending sales, Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”

Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes approximately 28,000 brokers and agents. The organization, based in Kirkland, currently serves 19 counties in western and central Washington.

Statistical Summary by Counties: Market Activity Summary - May 2009 (updated June 5)

May 2009 Single Family Homes + Condos	LISTINGS		PENDING SALES	CLOSED SALES
	New Listings	Total Active	# Pending Sales	# Closings	Average Price	Median Price
King	4310	13537	2801	1618	$423,875	$351,500
Snohomish	1759	5656	1160	666	$325,502	$299,950
Pierce	1632	6088	1196	643	$252,431	$225,000
Kitsap	531	2005	341	219	$292,797	$240,000
Mason	182	812	73	56	$189,062	$161,405
Skagit	258	1369	140	78	$251,548	$207,250
Grays Harbor	180	840	75	63	$139,161	$114,000
Lewis	152	722	78	40	$159,230	$138,150
Cowlitz	113	657	82	55	$194,685	$177,900
Grant	145	724	73	36	$166,956	$148,450
Thurston	521	1722	406	214	$273,164	$247,000
San Juan	64	499	14	4	$464,750	$410,000
Island	253	1136	107	86	$299,378	$248,500
Kittitas	152	612	48	38	$250,716	$170,000
Jefferson	84	562	34	12	$298,000	$294,500
Okanogan	86	386	27	17	$159,435	$140,000
Whatcom	496	2024	311	179	$269,633	$250,000
Clark	106	408	64	57	$229,296	$206,900
Pacific	60	404	39	13	$157,333	$175,000
Others	194	1155	91	60	$218,748	$214,000
MLS TOTAL	11,278	41,318	7,160	4,154	$329,680	$280,000

4-County Puget Sound Region Pending Sales (SFH + Condo combined)
(Totals include King, Snohomish, Pierce & Kitsap counties)

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	3706	4778	5903	5116	5490	5079	4928	5432	4569	4675	4126	3166
2001	4334	5056	5722	5399	5631	5568	5434	5544	4040	4387	4155	3430
2002	4293	4735	5569	5436	6131	5212	5525	6215	5394	5777	4966	4153
2003	4746	5290	6889	6837	7148	7202	7673	7135	6698	6552	4904	4454
2004	4521	6284	8073	7910	7888	8186	7583	7464	6984	6761	6228	5195
2005	5426	6833	8801	8420	8610	8896	8207	8784	7561	7157	6188	4837
2006	5275	6032	8174	7651	8411	8094	7121	7692	6216	6403	5292	4346
2007	4869	6239	7192	6974	7311	6876	6371	5580	4153	4447	3896	2975
2008	3291	4167	4520	4624	4526	4765	4580	4584	4445	3346	2841	2432
2009	3250	3407	4262	5372	5498

2009 Median Prices, Closed Sales (SFH + Condo combined)

	Jan	Feb	Mar	Apr	May	Change since Jan
King	$364,137	$348,000	$335,000	$350,000	$351,500	-3.47%
Snohomish	$295,000	$301,750	$304,950	$290,000	$299,950	1.68%
Pierce	$235,000	$239,950	$228,375	$225,000	$225,000	-4.26%
Kitsap	$234,200	$225,000	$246,495	$240,000	$240,000	2.48%
Mason	$170,900	$147,075	$130,000	$137,550	$161,405	-5.56%
Skagit	$246,950	$252,500	$240,000	$225,000	$207,250	-16.08%
Grays Harbor	$155,855	$131,200	$142,250	$150,000	$114,000	-26.86%
Lewis	$158,250	$162,000	$166,000	$174,950	$138,150	-12.70%
Cowlitz	$161,500	$151,250	$180,000	$179,000	$177,900	10.15%
Grant	$152,557	$166,539	$145,125	$144,000	$148,450	-2.69%
Thurston	$239,950	$259,000	$240,000	$232,600	$247,000	2.94%
San Juan	$573,500	$520,000	$1,162,500	$226,000	$410,000	-28.51%
Island	$243,803	$247,000	$248,500	$244,450	$248,500	1.93%
Kittitas	$230,000	$210,000	$206,675	$196,000	$170,000	-26.09%
Jefferson	$227,500	$325,000	$238,730	$213,750	$294,500	29.45%
Okanogan	$139,000	$137,450	$110,000	$149,000	$140,000	0.72%
Whatcom	$245,000	$246,218	$257,000	$259,450	$250,000	2.04%
Clark	$221,000	$236,375	$248,750	$202,500	$206,900	-6.38%
Pacific	$182,000	$122,500	$147,000	$135,000	$175,000	-3.85%
Others	$183,500	$193,371	$186,500	$224,500	$214,000	16.62%
Total	$273,000	$278,000	$270,000	$270,000	$280,000	2.56%

            As a trusted advisor for my customers, my advice is not helping to bring the pay check home but it is cementing long term relationships which are critical to the survival of any business. Many of the people in my customer database have been with me for years. - As a Realtor and an L.O. I've been able to truly assist many people make a difference in their lives and that has always left me with a sense of satisfaction

            This year has me tightening up all of the tried and proven ‘constant contact' techniques with past and present customers. It's back to basics with touch systems and handing cards out. I almost forgot how to approach people and talk about real estate…sadly though; most of my conversations end on a down beat rather then an upbeat.

READ MORE BELOW page 2….

    Are we seeing a return to a healthy market yet, here in SeattleWashington? Not quite although generally there are some signs of life that are very encouraging.

    he National Association of Realtors or NAR, reported has reported the median resale home price is expected to fall 6.4% this year. Previously the NAR predicted a 4% drop indicating we are not quite out of the woods yet - but we are getting closer hopefully. We think there is some light around the corner. say a year from now or so and things are looking up in some neighborhoods now.

    The Realtor trade group's latest forecast also anticipates a 4.5 percent annual drop in existing-home sales this year, followed by a 6.3 percent rise in sales in 2009.

    Single-family housing starts are expected to plunge 36.3 percent this year and another 1.8 percent in 2009, NAR reports, with the median new-home price dropping 3.1 percent this year.

    Good news is the pending sales index rising out here in the west. The index that gauges pending sales of resale homes fell 13.1 percent compared to last year, however, but was up 6.3 percent from a record low set last month.

    NAR's Pending Home Sales Index, which is based on home-purchase contracts signed in April, rose 4 percent year-over-year in the West while dropping 22.5 percent in the South, 13.1 percent in the Midwest and 12.2 percent in the Northeast. The index data dates back to 2001. It’s good to live here in Seattle I think.

    The monthly asking price of homes in 10 major U.S. cities dropped 0.3 percent in May, but has risen 0.3 percent in the past three months. Another positive sign.

    For-sale listing prices rose in 15 of 26 market areas tracked by Altos Research in May compared to the previous month, and the largest monthly listing-price rise was in Denver, up 3.7 percent. The largest decline in asking price was in Las Vegas, down 3.7 percent. In the past three months, the asking price dropped 6.3 percent in the Las Vegas market and rose 6.5 percent in the Denver market.

    For-sale inventory rose in 25 of 26 markets in May — inventory declined 1.3 percent in Miami during May and has declined 2.4 percent in the past three months.

    The bottom line seems to be a continued trend with fewer homes actively listed and fewer homes sold over last year. This is certainly true in and around KingCounty here in the SeattleWashington area. It seems that home sellers and home buyers are being cautious, of course we need to remember that buyers are down a bit because loans are just a little more difficult to pick up then in the past.

    Thinking of selling your home? Let’s get a CMA, comparative market analysis, of your home value! This will help you establish an accurate sales price range. Click on CMA - no hassles.

    There is a list available at the King County web sites of participating Green builders, including developers, painters, carpet companies, etc, and although  I suspect many are not totally on board with the building green concept of ‘save the earth or die’ and are really on the list to attract business,- it’s a good start.

    My wife, Jan, and I hope to incorporate much of this thinking into our next home. Currently we are considering buying a home in the Fairwood community. Mostly because they have sidewalks and my kids can ride their bikes there without being hit by cars as easily – maybe I will learn to golf. Maybe pigs will fly….I mean like golf, I just don’t have the time.

    At any rate, building anything, whether it’s a home or car, without incorporating some environmental common sense is becoming more and more criminal.

    Obviously the intent behind total disregard of this philosophy is ‘Hey-I don’t care about you and your kids and their future’

    Now we have guidelines for new construction and home remodel development that are helpful. Certainly we can’t switch over to Green construction without first having an understanding of what this means.

    Built Green™ is a residential building program of the Master Builders Association developed in partnership with King and SnohomishCounties. The program provides builders, developers and consumers with easy-to-understand rating systems that quantify environmentally preferable building practices for the remodeling or construction of homes, multi-family units, and community developments. Based on the green building scores received, a home is classified as a one-, two-, three-. Four- or five-star Built Green™ project

    Im guessing our current home is about a 1/2 star efficient.

    Built Green™ -certified homes incorporate design strategies and features that offer opportunities to protect the health of families and the environment. This includes:

-  Site and water protection

-  Energy efficiency

-  Health and air quality

-  Materials efficiency

-  Environmentally responsible home ownership

Clever stuff for sure.

    Below are some basic steps we all take as homeowners to begin supporting positive change in our homes and communities. If enough people make changes, others will follow – no one likes to appear to be the local slacker. Except the guy with overgrown bushes and lawns with broken car’s all over. That guy really doesn’t care.

How Green Remodeling Can Help Sell Your House

1. 1.  Replace as many light bulbs as you can with CFLs (compact fluorescents). CFLs use a quarter of the electricity as regular bulbs, and lighting accounts for 20% of home energy use.                     
2. Upgrade any old or questionable appliances with new Energy Star-certified models. The EPA's blue and white label indicates models must be 10% to 50% more efficient than standard offerings.
3. Install a programmable thermostat.                               
4. Make sure cracks are tightly caulked and leaks are sealed. Just doing that can drop your annual heating bill by $100, according to Department of Energy figures. Also consider if your insulation might need beefing up.   
5. Putting on a fresh coat of the new and now-widely available low volatile organic compounds (VOCs) paints can go a long way toward attracting buyers.  It gives Realtors something to market," she says.
6. Old carpets can be a real turnoff, and can emit allergens and toxins. Exposing any hardwood floors is a good way to bring out a home's beauty and value, but if you don't have that option consider new, eco-friendly carpeting

jch

    I like when I see a Renton new construction home being built. New construction - for the most part- means quality and a guaranty that everything works. Not like my 100 year old home – an ongoing project and head ache. Some one tell my wife, please, cuz she just wont hear it from me. 

    Often we buy a home and within in a few months or a few days the sink backs up or the cable line drops or something. New construction usually means this isn’t going to happen -for a while- and you biggest head ache is getting the contractor back within a year to honor his or her guaranty of finishing and patching any flaws that manifested themselves in that first year of ownership.

    Many of us have had the experience of sticking blue tape on those area's where some trim came loose or nail and screw heads popped through, etc and we live with the new 'blue tape' tapestry for a year, which is the typical time period for a contractor to provide work guaranty’s and they come in and fix up all the little things that sprung loose. And hopefully they stay fixed.
 
    The numbers for new construction in RentonWashington are encouraging. When I listen to the news including CNN, against my better judgment, I hear the reports of new construction for residential homes having dropped way off. And this is true for the most part.
 
    Remember we live in a comparatively robust economy here in the Northwest and particularly in KingCounty and naturally Renton totally rocks right in the middle of it all!. The April 2007 and April 2008 numbers new construction numbers show relative stability. So- are these homes selling? Good question.
 
    Currently in my neighborhood here on Talbot Hill we have some new construction. The stuff around the corner is junk and not worth a second look in my opinion. That being said they will be priced reasonably enough for first time buyers to seriously consider.  Yes, I know that I said new construction reflects reliability and quality and all that good stuff but some builders are still building cheap homes so be aware. These homes are unfortunate for my neighborhood but at least I can’t see them from my house.

    We do however, have a new home directly across the street and it's nice. That builder will place 2 more on those lots I think. The issue he may have is in the list price. Way to expensive and no apparent strategy to 'power market' the home meaning it will probably go the distance for ‘time on market’ and end up selling for less then he would get it if he had priced it better to start with. Remember, my belief is if your not marketing Globally your not talking to your market. Any realtor can stick a sign in the ground and stick you on Craig’s list and the newspaper. Whatever….'Call 'er good!' I don’t think so. If you have a strategy then you are better off.

    Market saturation levels or market inventory is measured in months, now, and not days or minutes like the good old days a couple of years ago. Although this is improving I believe, in the final analysis the list price of your home -and this includes new construction homes- is the bottom line.

    And if your going to spend half a million dollars on a home then you absolutely need to take the time and see what else within the area of your search your dollar can buy. And that half million dollar home better have real hard woods on the floor and not top of the line Pergo. I like Pergo but let’s face it - it's Pergo!
 
    Our Housing market is different. The summer season is just about here. It is still a good market and if you have a strong professional working for you either helping you buy a home or helping you sell a home then you'll probably be okay if you have patience. Renton homes are a smart investment for many reasons and new construction in Renton might be just the thing for you.

Happy house hunting

Jch 
(425) 894-4316

(DOM = Days on Market)

RULES OF THUMB:

Less then 6 months of Inventory= SELLERS Inventory
More then 6 months of Inventory= BUYERS Inventory

 King county homes sold. Comparitive numbers as in months worth of inventory are swinging back to a market in the middle. One that is favorable to both Buyers and Sellers.  The number of homes selling now as compared to last year is slightly less, although average selling prices are continuing to be healthy. However some area's have seen a reduction in average selling price over last year. 

Although home mortgages are still tougher to get then last year, you know, when you only needed a pulse to borrow a million dollars or so, banks are are making healthy adjustments to help insure we dont see the foreclosure and pre-foreclosure plague we are seeing today. More buyers are returning to the market and qualifying for home loans.

    In the Talbot Hill area of Renton alone, near the Valley Medical Center, there are 11 condos for sale. This is a newer area mostly built no later then the mid 90’s. Some of the Condo communities here include Talbot Park condos, Campen Springs condos, Ashburn condos and Summit Park condos. Many of these are 2004 construction and more recent.

    This can be a strategically smart location for many. These condos are close to all freeway access and offer many local amenities.

    Home sale prices in this area range from $249,000 to $300,000 depending on the home, size, view etc. Search tools for condos are available – I offer one here. Condo Link.

Choose to set up your own specific condo listing search that gets automatically updated by email every day. This is good data as you’ll see the same data I see as a professional realtor.

    This market is leaning heavily to a Buyers market and Renton condos can be a great opportunity for the seasoned buyer or first time buyers.

  For the most part urban planning and expansion in Renton seems to be progressing smartly. The exception being the poorly planned and generally unsupported construction of the downtown Transit center and the severely underused though costly adjoining parking garage.

    I just read an article written by Laurence Yun, the chief economist for NAR (National Association of realtors.) In it he sites a 41% increase of foreclosures but reminds us that this increase is mostly the result of investor-heavy real estate purchases in Arizona, California, Florida and Nevada.

  These guys have been flipping properties for years and suddenly the bottom dropped out of that plan. I haven’t checked the numbers but he also comments that the number of foreclosures in Utah, New Mexico, North Carolina and South Carolina is actually declining. This would be good news and I would want to confirm this.

    The current statistics in Renton and most parts of KingCounty show us that even though houses are sitting longer on the market and we have less buyers available to us then in the past, home values have continued to increase. Certainly not like they have in recent years however, this shows us that more then anything there is a confidence issue people want to overcome.

  Renton real estate is still a very wise investment and it is a great time for prospective home buyers to take advantage of this market. So like I said there are plenty of reasons to buy a home in Renton.